In a development that triggered a nearly 10% rise in the share price, European Metals Holdings Limited (ASX & AIM: EMH; NASDAQ: ERPNF) engaged Minviro, a UK-based and globally recognized sustainability and lifecycle assessment consultancy, to provide an ISO-compliant Lifecycle Assessment (LCA), including an assessment of the carbon footprint, of the Cinovec lithium / tin project in the Czech Republic.

Pewter is certainly in the news right now with the price rising to US $ 31,255 after hitting a 10-year high on Tuesday.

While lithium carbonate and lithium hydroxide monohydrate will be the commodities produced by European Metals, the credits from tin production are important in terms of reducing production costs and previous modeling was based on a price. of tin well below the current spot price.

In June 2019, European Metals published the results of updating the process scheme previously developed to enable the production of lithium hydroxide (LiOH.H2O).

This was an update to the 2017 Pre-Feasibility Study (PFS) that applied a tin price assumption of US $ 22,000 per tonne, which based on the envelope figures , has been in the middle of the metal’s low and high price range (around US $ 15,000 – US $ 30,000) over the past 10 years.

On that note, the key PFS figures that support the Cinovec project are an after-tax net present value (NPV) return of nearly US $ 1.2 billion and an internal rate of return (IRR) of 28.8%. for the project.

The PFS was based on an assumed price for battery grade lithium hydroxide of $ 12,000 / tonne.

EMH’s production will be in the lower half of the cost curve, a key competitive advantage that can, to a large extent, be attributed to the value of the tin credits.

The deposit contains a combined total of 7.22 million tonnes of lithium carbonate equivalent and 263,000 tonnes of tin, which, especially at current prices, makes the value of tin in soil a very valuable resource. precious.

As the following 50-year chart from tradingeconomics.com shows, if tin breaks the US $ 32,000 per tonne mark, it could well set an all-time record, effectively providing strong stock price support for the stock price. companies exposed to metal.

Multiple dynamics at play in terms of tin price support

Tin producer Malaysia Smelting Corporation (MSC) said it had suspended operations and declared force majeure on deliveries, which gave the tin price a boost.

It was not until February that Bloomberg announced that the London tin market was facing the strongest supply squeeze in at least three decades, as declining inventories, strong industrial demand and the Growing investor interest is driving spot prices.

Therefore, the surge in commodity prices is not only attributable to MSC events, but also to potentially increased demand from industrial users.

At the head of this increased demand has been the rush for high-end computer chips.

On that note, Bloomberg Reported Geordie Wilkes, head of research at Sucden Financial, saying: “Semiconductor exports and production suggest that solder demand has had a very strong year, and it looks like it could continue, but unfortunately l offer is lagging behind.

LCA to be produced for lithium carbonate and lithium hydroxide

Going back to the latest news from European Metals regarding the appointment of an LCA consultancy firm is an important step for the group, as assessments will be produced for both battery-grade lithium carbonate and lithium hydroxide. Battery grade monohydrate that will be manufactured in a nearby lithium chemical plant. at the Cinovec mine.

Life Cycle Assessment is a widely accepted and robust numerical method used to quantify climate change and other environmental impacts for industrial processes, while identifying opportunities for impact reduction and process improvement.

Cinovec LCAs will be benchmarked against global lithium peers, allowing investors to assess their investment options in the sector.

Not just low cost, but low carbon

This could work well in European Metals’ favor, as Minviro will be actively engaged in identifying low carbon optimizations in the feasibility study under development for Cinovec.

Cinovec’s LCAs are expected to demonstrate strong carbon footprint credentials with reduced energy consumption, less intensive reagent application and net carbon credits from mining and process by-products.

The report is expected to be completed by the September 2021 quarter.

The International Organization for Standardization (ISO) has published a set of standards for life cycle assessment (‘LCA’) (ISO 14040 and 14044).

The standards describe the best practices and principles to be applied for an LCA study.

ISO compliance includes a third party review by a group of independent experts, and the results are then allowed to be publicly disclosed and used for comparison with different primary production methods of raw materials.

This will provide the Cinovec project with an independently verified carbon assessment recognized by financiers and potential buyers.